MANILA, Philippines — More oil firms are asking the Department of Energy (DOE) to set aside its oil unbundling policy even as the agency pushed back the implementation to the middle of July.
The oil unbundling policy will take effect on July 13, two weeks later than the original plan, DOE Assistant Secretary Leonido Pulido said in a text message yesterday.
“It would be delayed as an annex of the circular was not published, so our legal services decided to have it re-published in its entirety in compliance with the legal requirement of complete publication and in order to avoid any possible confusion on the effectivity,” he said.
However, the Independent Philippine Petroleum Companies Association (IPPCA) asked DOE Secretary Alfonso Cusi to suspend and eventually withdraw the circular that details the oil unbundling policy.
“After going over its provisions, we are of the view that its implementation would greatly affect the viability of our business and run counter to the provisions of Republic Act 8479 or the Downstream Oil Industry Deregulation Act of 1998,” the group said.
In its position paper, IPPCA said the circular is an illegal act since it compelled industry participants to unbundle the price of their petroleum products.
The group argued that the power to pass or amend laws could only be done by Congress.
Under the Downstream Oil Industry Deregulation Act of 1998, the DOE was authorized to monitor both the international and domestic price movements of petroleum products, as well as the compliance of businesses with national standards.
The circular, signed by Cusi late last month, requires all oil companies to report their “unbundled price adjustments,” including import costs, tax burdens, biofuel costs, oil company take components, and other essential cost components that contribute to the changes in retail prices.
“In our view, this imposition by the DOE is not authorized by RA 8479 because, after the deregulation of the industry, the DOE is only allowed to conduct limited monitoring of the activities of oil industry players,” IPPCA said.
IPPCA further said compelling the industry players to unbundle the prices of petroleum would indirectly regulate their activities.
“The unbundling of their prices will effectively result in their regulation by the DOE contrary to the very concept of deregulation. It will eliminate competition because any difference in the price or components thereof between and among the industry participants will not only be revealed but may be used easily as instruments of unfounded investigation and harassment,” it said.
The circular also singles out oil industry players from the equal protection clause of the Constitution, which is against undue favor and individual or class privilege, as well as hostile discrimination or the oppression of inequality.
“This is effective price regulation and control without authority of law. While a law has been passed deregulating the downstream oil industry, the DOE continues to single out the industry players and unduly prevent them from engaging in fair competition by continuously interfering in the determination of the price of their products,” IPPCA said.
Earlier this week, major oil players Pilipinas Shell Petroleum Corp. (PSPC), Petron Corp., and the Philippine Institute of Petroleum Inc. (PIP) separately asked courts stop the DOE’s oil unbundling policy.
PIP is an independent body of oil companies and its members include Chevron Philippines Inc., Isla LPG Corp., Petron Corp., PSPC, PTT Philippines Corp., and Total Philippines Corp.
The filings made by oil companies are part of the democratic process and are respected by the DOE, Cusi said.
However, he said the agency had already referred the cases to the Office of the Solicitor General (OSG) as their legal counsel.